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Top 5 Signs You Should Consult a Bankruptcy Attorney

There were 9,470 bankruptcy cases filed in Minnesota in 2016 according to the United States Bankruptcy Court for the District of Minnesota. Those thousands of cases were all necessary for different reasons: divorce, family illness, business failure, job loss, and death to name a few. A lot of the individual consumer cases also would have had something in common; there were signs of trouble that led to a meeting with a bankruptcy attorney to discuss ways to improve the individual’s or family’s financial situation. The more of the following signs that you see in your own situation, the more likely it is that meeting with a bankruptcy attorney for a confidential consultation will help you get things back on track.

Sign 1: Changing your income tax withholding at work

Individuals who are employees have the ability to tell their employer how many dependents to use to calculate how much state and federal income tax to take out of their paychecks each pay period. The federal government provides tables that show the employer how much to take out, or withhold, based on the number of exemptions a person claims. Frequently, individuals who begin to feel the pressure of mounting debt increase the number of exemptions they claim so their employer will take less money out of their paychecks and give them more money, which they then use to pay more on debt. The problem of too little cash to keep up with payments is solved, but a bigger problem can be created by doing this for a long time. At the end of the tax year, a large debt to the state or federal government can be an even bigger problem to resolve than the other debts were. Meeting with an attorney before this situation gets out of hand makes it much easier to deal with.

Sign 2: Paying credit card minimums in order to charge necessities

Another way people try to make it through a financial crisis is by using credit cards to cover a gap in income. If there is an available credit limit and the minimum payment due is paid, the credit card available limit can be used to pay for gas, food, rent, and other necessities. This strategy can only work for a limited amount of time, because eventually the card maximum is reached. The increasing balance also increases how much the minimum payment is, so less actual cash can be used to cover living expenses and keep the credit card account active as well. Sooner or later, a different strategy has to be used to actually lower the monthly household obligations, and meeting with an attorney who can guide you through the maze of options can be the best free resource to information.

Sign 3: Borrowing money to pay off debts

Many people turn to new lenders when they are faced with debts they cannot pay. Sources such as friends and relatives, payday lenders, title loans, and retirement accounts like 401k or 403b plans through employers can offer a quick solution to the problem at hand. The downside to these lending sources is not always obvious when the loan is made though. For example, failing to pay the installment payments on a title loan may cause the repossession of the only reliable vehicle for getting to and from work. Payday loan lenders can take money out of a bank account to pay an overdue balance, which can make an already shaky financial situation even worse. There is also a risk with not paying 401k or 403b loans. These types of loans become taxable income if not paid back, so borrowers can end up owing the government for taxes that they didn’t plan on owing, as well as not having enough money saved when it is time for them to retire.

Sign 4: Not wanting to answer the phone or get the mail

For most Minnesotans, financial trouble is not one big event, but several small ones that happen quickly so there is no time to recover from one before another one comes. As new bills come in, the old ones fall behind, and the phone calls and letters from creditors and collectors begin. The longer this situation goes on, the harder it is to regain control over everything. Collectors tend to call for a while, then things become more serious and they begin to send letters. Those letters can be demands for payment, or if the issue is ignored long enough, letters from collection attorneys threatening court action. If the problem is still not addressed, garnishments and bank levies can make things even more difficult. Help from a professional can turn this situation around, and meeting with a bankruptcy attorney can make deciding how to address the situation easier.

Sign 5: Increasing general stress levels

There are internal signs of financial stress that go along with the external ones like borrowing money and unanswered phone calls. During consultations, many people discuss their recent lack of sleep, being unable to focus on anything but their debt and trying to come up with ways to pay it, the beginning of stress-related health issues, and increasing tensions with co-workers, children, friends, and significant others. Instead of letting the stress continue to build, outside help can provide alternatives. Many clients find that having a knowledgeable bankruptcy attorney available to discuss ways to stop the creditor actions that cause the increased stress improves the way they handle the other issues that come up in life.

To find out more about bankruptcy help for Minnesotans, contact Hedervare Law Office. Call 651-383-4725 now to schedule an analysis of your situation.

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